Back to top

Aggressive Growth

Park-Ohio Holdings (PKOH - Snapshot Report) reported earnings about 3 times higher than expected, which instantly pushed expectations higher.

Even though shares have moved higher, the valuations are great and this Zacks #1 Rank (Strong Buy) is poised for another run.

Company Description

Park-Ohio Holdings provides supply management services and manufacturing for engineered products. The company has 29 manufacturing and 52 logistic facilities.

Crushed Expectations

On Nov 8 Park-Ohio reported quarterly sales of $203 million, up 20% since the same period in 2009. Net income came in at $6.2 million, which is a strong turnaround from the $3.2 million loss a year go.

The covering analyst was not just surprised, they were shocked. The company earned 60 cents per share, more than 3 times the 19 cents the estimate was calling for. This was Park-Ohio's fourth consecutive earnings surprise.

Bullish Comments

Park-Ohio's Chairman and CEO commented that the company has been very busy in the past quarter booking new orders, which is now up about 50% year-to-date.

Also, the acquisition of Assembly Component System, which took place during the quarter, will add over $50 million in revenue next year.

Estimates Soar

Currently, expectations for this year's earnings are $1.10, up 19 cents since the quarterly news. Next year's forecast is calling for $1.54, up 29 cents.

The growth rate for this year is off the chart, coming up from a 7-cent loss in 2009. The projection for 2011 is for 40% growth.

Valuations

Right now shares of PKOH are going for about 12 times next year's earnings estimates. The price to sales is coming in at 0.27 times, showing solid value.

The Chart

Shares of PKOH were up nicely on the earnings surprise, but hit a wall when the stochastic hit "overbought" territory. However, the stock has taken a breather and could be poised for another move higher.

Park-Ohio Holdings - ticker PKOH >
<P ALIGN=

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%